Are You Financially Healthy?

Mar 04, 2020 12:00 PM 575 views

The Credit Information Bureau (India) LTD was incorporated in the year 2000, also famously known as CIBIL, the primary agency that provides credit reports for all Indian citizens. Fundamentally, CIBIL has the authority to source financial data of individuals such as credit card and loan information from financial institutions and represent this information in the form of a report known as a Credit Information Report (CIR). We are proud to announce that IIFL has recently partnered with the Credit Information Bureau wherein you can conduct a Financial Health Check-Up or get your personal credit report in a few clicks on India’s best trading application: IIFL Markets. A three-digit Financial Health Check-Up score will then be generated between the range of 300-900. The lower the score (300) it indicates that an individual has a lower level of creditworthiness. The higher the score it showcases that an individual has a good credit history and responsible payment behavior. Lastly, these scores are calculated on a minimum of 6 months of financial data. 

I’m pretty sure you must be confused about how a Financial Health Check-Up score is calculated. Not to worry we are here to help you out. The score is calculated based on the following factors: 

  • Record of all past payments 
  • Write-off’s, previous settlements and defaults 
  • Loans as a proportion of income 
  • Secured Loans vs Unsecured Loans 
  • Loan Equities 

After creating an analysis of the following factors a credit report is then generated with a score. 

How can you ensure you have a high credit score?

An ideal score is around the 700 mark or above (score range has been explained in detail below). This helps in getting pre-approved loans and credit cards. There are multiple cases where individuals have rejected home and business loans due to a bad Financial Health Check-Up score, therefore here are some ways in which you can maintain a high and healthy score.

(1) Low credit utilization: It’s best not to get a credit card if you do not have a fixed income. Moreover, going over the limit of a credit card is not advised hence if you think the limit exceeds your expenditure opt for a higher credit limit which will directly reduce your utilization limit ensuring a good credit score. For example: Having a limit of 1,00,000 and utilizing 70,000 means you are using 70% of your credit limit. To avoid such a high percentage being used you can simply opt for a higher credit limit - 5,00,000 and spending 70,000 means you are only utilizing 14% in comparison with 70% of your credit limit. This can aid in getting a better score showcasing less dependency on credit. 

(2) Discipline: In terms of making payments for credit cards and loans discipline is integral to maintain a strong credit score. Therefore making payments on time will positively impact an excellent record of all past payments.

(3) Variety: To maintain a good credit score it is always good to have a mixture of secured debt such as a car loan and unsecured debt such as a credit card. This is because in the unfortunate event where you are not able to pay the secured loan the banks will take away the asset, in this case, the car. Whereas in an unsecured loan there is no collateral and personal assets can be seized.

How can you check your credit score?

Successfully login to your account and go to the main menu. On the main menu click on the Financial Health Check-Up feature showcased in the image below.

After getting redirected to the main Financial Health Check-Up page, all you have to do is fill the details in that will take less than 2 minutes and then click the “Get Report” button. 

The following page showcases your score. As you can see in the image below the client has a score of 764 which is above average. Moreover, if the user has any credit cards or loans the outstanding amount is also showcased if you scroll to the bottom of the page. 

Moreover, if you would like specific details concerning factors that determine your credit score simply swipe to the 'Score Analysis" section. Over here you can see an overview of your performance broken down into the following categories: Excellent, Good & Poor.

All in all, this article outlines why it is integral to have a higher credit score that will eventually help you fulfill your financial needs. So hurry up and click here to get your FREE Financial Health Check-Up today on the highest rated trading app in India. 

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